The Difficult Job of Proving Misconduct to the Illinois Department of Employment Security (IDES) When a Truck Driver is Terminated for Poor Performance

March 2015
By Nancy E. Joerg, Esq.

As one would expect, sometimes a trucking company finds it best to terminate a truck driver for poor performance. This poor performance may involve very serious accidents or negligence (such as cross-dropping no lead gasoline into a premium tank, thereby contaminating that product). Sometimes, instead of properly loading thousands of gallons of no-lead and thousands of gallons of mid-grade, the driver carelessly loads thousands of gallons of no-lead and thousands of gallons of premium.

While there is of course usually no problem in terminating a driver who has had many accidents which cost the company time, money and damage to their reputation, our trucking clients are often surprised when they don’t win with the Illinois Department of Employment Security (IDES) - if the terminated truck driver files for unemployment insurance benefits with the IDES.

What many trucking clients don’t realize is that the IDES WILL give unemployment insurance benefits to drivers (even when they have had many serious accidents in the course of their employment) if the trucking company cannot successfully prove that these accidents were willful and deliberate on the part of the employee truck driver.

IDES DEFINITION OF MISCONDUCT: The IDES works under a strict legal definition of misconduct which requires that the trucking company prove that the incident was intentional, willful and deliberate. Mere negligence and terrible driving or a series of significant mistakes or accidents do not qualify as misconduct under the IDES definition.

Under Section 602A of the Illinois Unemployment Insurance Act, the definition of misconduct is:  “the deliberate and willful violation of a reasonable rule or policy of the employing unit, governing the individual’s behavior in performance of his work, provided such violation has harmed the employing unit or other employees or has been repeated by the individual despite a warning or other explicit instruction from the employing unit.” 

Section 602A requires deliberate and willful behavior and that behavior must have caused harm to the trucking company.  (These elements need to be proven by the trucking company in order for unemployment insurance benefits to be blocked.)

TIPS FOR TERMINATION LETTER: When you terminate a truck driver for a series of incidents in the course of their truck driving, indicate in the termination letter what reasonable rule or policy the truck driver intentionally failed to follow. This is a way to win with the IDES, by emphasizing the deliberate and willful nature of the driver’s behavior. For example, if the driver failed to double check the gasoline in a manner in which he was instructed by the trucking company, then that might be a winning strategy to block his claim for unemployment insurance benefits.

PROTESTING THE DRIVER’S CLAIM FOR UNEMPLOYMENT: Keep this in mind the next time you protest a truck driver’s claim for unemployment insurance benefits with the IDES…your goal is to prove to the IDES that the truck driver’s behavior was willful, deliberate and intentional. Merely pointing out what a bad driver that individual was is NOT a winning strategy. Accidents and negligence are (sadly) not enough.

For assistance with IDES audits, hearings, and independent contractor agreements (or for consultations on limiting your liability in the use of independent contractors), contact Attorney Nancy E. Joerg, who enjoys a nationwide reputation in working with companies who use Independent Contractors of all types. Nancy Joerg can be reached at Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

Employers Wonder: How Can my Independent Contractor File for Unemployment Insurance Benefits?

March 2011
By: Nancy E. Joerg, Esq. 

I frequently get phone calls from clients (employers) who wonder how their independent contractors can go to the local Illinois Department of Employment Security (IDES) office and apply for unemployment insurance benefits.

The most common comment I hear is "I thought that only employees could apply for unemployment insurance benefits."
 
Even when independent contractors sign a valid independent contractor agreement, they are not actually prohibited from going to the Local IDES Office and applying for unemployment insurance. Any individual can walk into the Local IDES Office and apply for benefits; of course, not all these individuals will be ultimately successful in obtaining unemployment insurance benefits.

IDES WILL ASK FOR ALL SOURCES OF INCOME: If an independent contractor applies for unemployment insurance benefits (either going in person to the Local IDES Office or applying online), they will be asked for all sources of income that they earned over the past year. Usually, the last "30 day employer" is the company who is "charged" for the unemployment insurance benefits that this individual might obtain.

IDES WILL CROSS CHECK SOCIAL SECURITY NUMBER WITH SOURCE OF INCOME: In the course of writing down/reporting all the sources of income for that individual for the past year, the name of a company where the individual worked as an independent contractor may arise. The IDES will cross check the individual's Social Security Number with that source of income. If the IDES finds out that the IDES did not report wages to the Social Security Number of that individual, that discrepancy will normally trigger an IDES audit of that company-even if the individual was classified by the company as an independent contractor.

Independent contractor/employee discrepancies are the biggest source of leads for IDES audits: When an independent contractor applies for unemployment insurance benefits, the IDES will not assume that the individual is indeed an independent contractor. Rather, the IDES will apply its legal tests to the fact pattern and see whether the IDES agrees that the individual is an independent contractor. The two most common IDES independent contractor legal tests are: 

1. Section 212.1: If the individual applying for unemployment insurance benefits is a truck driver/owner-operator, then the IDES may apply the legal test known as Section 212.1 (truck owner-operator) of the Illinois Unemployment Insurance Act. 
2.  Section 212(A), (B), and (C): If the individual applying for unemployment insurance benefits is a "regular independent contractor" (not a truck owner-operator), then the test most likely to be applied is Section 212(A), (B), and (C) of the Illinois Unemployment Insurance Act. 

IDES WILL STILL LOOK AT THE ELIGIBILITY OF THE EMPLOYEE: If the Local IDES Office determines that the individual trying to obtain unemployment insurance benefits is really an employee and not an independent contractor, then the IDES will still evaluate the fact pattern to see if this newly classified "employee" is eligible for unemployment insurance benefits. For example, an individual can be found to be ineligible for unemployment insurance benefits because the individual committed misconduct. If an individual is guilty of misconduct, the individual will be denied unemployment insurance benefits even though the IDES found the individual to be an employee (and not an independent contractor).

Even when individuals are found to be ineligible by the IDES for unemployment insurance benefits, if a company has classified them as independent contractors (but the IDES has deemed them to be employees), this will usually lead to an IDES audit of the company.

IF AN INDEPENDENT CONTRACTOR FILES FOR UNEMPLOYMENT, ASSUME YOU WILL BE AUDITED BY IDES AND BE PREPARED: If one of your independent contractors files for unemployment insurance benefits, assume you will eventually be audited by the IDES. Prepare yourself as thoroughly as possible for that coming event. One good way to prepare for an IDES audit is to fill out a Worker Relationship Questionnaire (the multi-page document that IDES auditors use to determine whether an individual is an independent contractor or an employee).

If readers would like a free copy of the questionnaires that IDES auditors use, please contact Wessels Sherman Legal Assistant Tammy Nelson at 630-377-1554 or via email at tanelson@wesselssherman.com.

  

Questions about this topic or other management-side labor and employment law issues? Please contact WS Shareholder and Senior Attorney Nancy E Joerg at 630-377-1554, najoerg@wesselssherman.com, or visit our website.

Emergency Unemployment Insurance Issues for Illinois Employers

July 2009
By Nancy E. Joerg, Esq.

Recently, I spoke with a very experienced unemployment insurance consultant who sounded the alarm! He told me that in a few months' time, Illinois employers are going to be screaming bloody murder when they find out what their new unemployment insurance rates are.

This unemployment insurance consultant (who has very close contacts within the Illinois Department of Employment Security (IDES) and many years of experience working with companies on their unemployment insurance rates) confided in me that due to the very tough economy and all of the unemployment insurance benefits that are being given so liberally, Illinois employers will find that their unemployment insurance rates are going to increase dramatically across the board. Of course, employers who have had unemployment insurance benefits charged to their account will find their rates go even higher. (Even if the company had no unemployment insurance claims against it, its IDES rate will still increase.)

This unemployment insurance consultant told me that he is fully expecting the highest unemployment insurance rates in Illinois history!

The IDES sometimes makes inadvertent mistakes in calculating unemployment insurance rates for companies. Therefore, if you believe there are errors on your IDES rate notices, promptly protest the rates before the strict due dates. If increased rates are not protested by the due dates, the rates become final.

Because of this frightening situation which looms on the horizon, Illinois businesses should be especially vigilant about evaluating all claims for unemployment insurance by ex-employees. In my experience, companies are far too lax and pessimistic about protesting claims for unemployment insurance, thereby costing themselves thousands of dollars in unemployment insurance costs.

In view of the dramatic increase in unemployment insurance rates, all Illinois companies should re-double their efforts in protesting all unemployment insurance claims by their ex-employees.

It is simply not true that companies cannot win when they protest unemployment insurance claims.
We have had tremendous success in our law firm in battling unemployment insurance claims and believe firmly that it is definitely worthwhile to protest these claims. Remember that with each unemployment insurance claim that is charged to your Company's unemployment insurance, the rate will go up dramatically, and this will have a very significant impact on your unemployment insurance rate when it is recalculated by the IDES.

Questions about this topic or other management-side labor and employment law issues? Please contact WS Shareholder and Senior Attorney Nancy E Joerg at 630-377-1554, najoerg@wesselssherman.com, or visit our website.